Englewood mayor voted for project financed by bank he has a stake in

As a member of his town's planning board, Englewood Mayor Frank Huttle voted to approve a major project that turned out to be financed by a bank in which he’s one of the largest shareholders.

But it’s not a conflict, Huttle said, because he had no idea that the bank, ConnectOne — for which he serves as a member of the board of directors — would finance the project.

Story Continued Below

“I first learned of the loan at the groundbreaking after the loan had taken place,” Huttle told POLITICO New Jersey. “Other than the bank representative attending the groundbreaking, I don’t know of any other specifics. “

Huttle, a Democrat who has been in office since 2008, wears several hats and is half of a New Jersey political power duo with his wife, longtime Democratic Assemblywoman Valerie Vainieri Huttle. He’s also of counsel to the politically connected law firm DeCotiis, FitzPatrick & Cole, founder of the Bergen Performing Arts Center and a trustee at several charitable organizations. And as mayor of Englewood, he automatically has a seat on the planning board and appoints most of its members. Huttle is also a developer behind a major project in North Bergen called Hudson Mews.

Huttle said that his vote was merely to approve a plan, the details of which had been settled on in 2011 and had been established by the city council.

“In essence it's a formality, that it was all part of a settlement agreement,” he said.

And he argued that the fact that this information is surfacing now is not indicative of his own conflict, but rather is the product of a political brawl that has consumed the Democratic Party in this town of 27,000 — a fight that stems in part from another matter involving the zoning board.

New Jersey’s Municipal Land Use Law says that “no member of the planning board shall be permitted to act on any matter in which he has, either directly or indirectly, any personal or financial interest.”

And Huttle has a substantial financial interest in ConnectOne bank. He is on its board of directors and according to an SEC document as of June of 2015 owned 186,799 shares. At its Friday closing price of $15.64, that’s roughly $3 million. (There are 30 million outstanding shares of the bank).

Huttle is not the only politically connected person who owns a stake in the bank. Public relations mogul Michael Kempner, one of New Jersey’s biggest Democratic fundraisers, is also a major shareholder and member of its board, as is Stephen Boswell, who leads an engineering firm that had almost $12 million in public contracts in 2015.

“I have been advised as a matter of law, a conflict of interest is dependent upon knowledge of the conflict at the time it arises,” Huttle said. “All of the reported conflict cases involve recognition of the relationship at the time the public official is acting and I was unaware of the construction loan. There is absolutely no scenario where I would knowingly ignore a conflict and risk my reputation.”

The project financed by ConnectOne is ES4, an office building with retail space that’s part of a larger project that includes nearly 200 residential units. The planning board, include Huttle, voted 7-0 on April 9, 2015, to approve the project, according to the board’s minutes.

But Huttle said that as a member of ConnectOne’s board, he is not involved in individual loan decisions or in hiring the people who approve the loans. He also noted that he has always publicly disclosed his stake in the bank on state-required forms.

The office building is part of a larger project that is just now coming to fruition after years of litigation that pit the city and the developer, The Hekemian Group, against each other.

It's unknown when the bank finalized its financing for ERA South, which is being developed by The Hekemian Group, because neither the bank nor the developer returned calls seeking comment. Nor is it known how much financing is involved.

What is known is that on June 2, less than two months after the city’s planning board gave the project the go-ahead, Huttle and ConnectOne senior vice president William Tierney were photographed at its groundbreaking with ceremonial shovels of dirt.

ConnectOne is also involved in a project with Hekemian further north in Bergen County, in Montvale.

Eugene Skurnick, an Englewood councilman and political opponent of Huttle, said he found it hard to believe that Huttle wouldn’t have known ConnectOne was financing the project.

“Frank Huttle in his professional life is occupied with every detail with everything. That’s the way he is the mayor of the city,” Skurnick said. “We have a weak-mayor form of government, but he’s involved in every aspect of everything. Council business, ward business, what the city manager is doing. He’s involved in almost everything. “

Skurnick also said it poses a potential conflict that Huttle’s business partner on his North Bergen project, developer James Demetrakis, is the chairman of Englewood’s planning board.

“I’m deeply concerned about that,” Skurnick said.

Huttle earlier this month unsuccessfully backed a candidate in the Democratic primary to take out Skurnick’s council ally, Michael Cohen. Skurnick and Cohen, in turn, backed rival slate of Democratic municipal committee candidates that intended to take away local party influence from Huttle.

Huttle himself has accused Skurnick’s political allies of conflicts of interest. In 2014, Huttle vetoed an ordinance that would have changed the zoning of a single-family property in town to allow building multi-family townhouses when it turned out that the property’s owner, Marvin Ahnalt, then the chairman of the planning board, owned it and had applied to build townhouses there. Cohen, who voted in favor of the ordinance, is Ahnalt’s second cousin by marriage, The Record reported.

Ahnalt was succeeded as chairman by Demetrakis, whom Huttle noted he did not name to the planning board.

“My business relationship has nothing to do with the city of Englewood,” Huttle said.

New Jersey courts use the standard when determining whether conflicts exist that they must, according to several decisions, “be interpreted to show that they had the likely capacity to tempt the official to depart from his own public duty," Huttle noted.

Huttle said since he didn’t know about the development, there’s no way he could have been tempted.

On the other hand, New Jersey’s highest court has taken a broad view of where a conflict exists on zoning issues in at least one case.

Jonathan Guldin, an attorney from Montclair, represented a plaintiff who charged that a mayor and councilman were conflicted when they voted on a development next to a Unitarian church in which they held leadership positions. After losing at the trial and appellate court level, the Supreme Court ultimately sided with Guldin’s client.

Guldin said that under New Jersey's Local Government Ethics Law, a mayor with a major interest in a bank may have had a conflict regardless of whether he knew about it.

“The facts are that there was a mayor who was a shareholder of a bank that had the potential gain from this project. I think that would give, under the Local Government Ethics Law, a conflict,” he said. “And I don’t know that his knowledge is really material.”